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Income Tax - Appellate Tribunal - Case Laws
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2023 (2) TMI 1145
Assessment u/s 153A - mandation of valid approval obtained in accordance with law u/s 153D - undisclosed income as alleged to emanate from sale of land and immovable properties as such, and as is apparent from electronic data and other seized documents dedicated and focused efforts were made in this area - HELD THAT:- In the present batch of appeals the Additional CIT has given approval in batches of 69, 62, 37, 54 and 24 assessment orders. As observed by the Hon'ble Allahabad High Court in Siddharth Gupta [2022 (12) TMI 1021 - ALLAHABAD HIGH COURT] it is humanly impossible to go through the records of more than 50 cases in one day to apply independent mind to appraise the material before the Assessing Officer. Therefore, we have no hesitation to hold that the approval was mechanical. As investment of the share applicants/subscribers ....... + More
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2023 (2) TMI 1144
Disallowance u/s 14A r.w.r. 8D - Assessee has received dividend income which was claimed as exempt u/s 10(34) - suo moto addition by assessee - AO disallowed interest expenditure attributable to income which does not form part of the total income - HELD THAT:- In the instant case amount of expenditure by way of interest other than the amount of interest included in clause (i) incurred during the previous year was Rs. 40,19,403/- as can be deciphered from the table. With regard to B&C of the Formula the AO is directed to take into consideration the “dividend yielding investments” while computing the disallowance. The appeal of the assessee on this ground is allowed for statistical purposes. Additional depreciation on new plant and machinery - AO found that the assessee claimed depreciation @20% on though the machinery was p....... + More
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2023 (2) TMI 1141
Deduction u/s 80P(2)(d) - interest income earned by the Co-operative Society on its investment made with cooperative bank - HELD THAT:- Now this issue is longer res integra having been decided in favour of the assessee in case of Palm Court M Premises Co-operative Society Ltd. i[2022 (9) TMI 650 - ITAT MUMBAI] by the coordinate bench of Tribunal by distinguishing the judgement rendered of Totgars Co-operative Sale Society Ltd [2010 (2) TMI 3 - SUPREME COURT]and by discussing the decision rendered by Hon’ble Bombay High Court and Hon’ble Gujarat High Court wherein it is held that interest income earned by the Co-operative Society on its investment made with cooperative bank would be eligible for claim of deduction under section 80P(2)(d) Hon’ble High Court of Karnataka in case of Pr. CIT & Anr. Vs. Totgar’s Co-o....... + More
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2023 (2) TMI 1115
Denial of exemption u/s. 80P - Return was filed belatedly u/s. 139(4) of the Act - adjustments prescribed in Section 143(1) - HELD THAT:- It is apparent from the Ld. NFAC order when the assessee has clearly pointed out the amendment in Section 143(1) made by Finance Act, 2021 which is not applicable for the present assessment year 2019-2020. However the same was not been considered by the Ld. NFAC and erroneously dismissed the assessee’s appeal. As relying on Lunidhar Seva Sahakari Mandali Ltd [2023 (2) TMI 1012 - ITAT RAJKOT] assessee cannot be denied the deduction u/s. 80P of the Act on the ground that the assessee did not file the Return of Income within the due date prescribed u/s. 139(1) of the Act under proceedings made u/s. 143(1) of the Act for the Assessment Year 2019-20. Appeal filed by the Assessee is hereby allowed.
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2023 (2) TMI 1114
Penalty levied u/s 271(1)(b) - assessee failed to comply notice u/s 142(1) - scope of bonafide reason - HELD THAT:- Division Bench of Delhi Tribunal in Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust [2007 (8) TMI 386 - ITAT DELHI-G] held that where assessee had not complied with notice under Section 142(1) but assessment order was passed under Section 143(3) and not under Section 144, that meant that subsequent compliance in the assessment proceedings was considered as a good compliance and defaults committed earlier were ignored by Assessing Officer and, therefore, penalty under Section 271(1)(b) was not justified. As find that similar view was followed in a series of decisions as has been relied by the ld. AR for the assessee in his submission. Thus, considering the fact that assessment in the present case was completed u/s 153A/143....... + More
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2023 (2) TMI 1113
Disallowance u/s 14A r.w.r. 8D - suo moto disallowance made by the assessee - sufficiency of interest free funds - HELD THAT:- The aggregate of the Share Capital, the General Reserves and Surplus in Profit and Loss account, which can be termed as interest free funds available with the assessee as at 31st March 2009 is much in excess of the investments as on 31st March 2009. In the case of Reliance Utilities & Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT) has held that where an assessee had own funds as well as borrowed funds, a presumption can be made that the advances for non-business purposes have been made out of the own funds and that the borrowed funds have not been used for this purpose. We further find that identical issue arose before the co-ordinate Bench of Tribunal in assessee’s own case in A.Y. 2012-13 [2020 (2) TM....... + More
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2023 (2) TMI 1112
Validity of order u/s 92CA - time limit for passing of the TPO order - period of limitation - HELD THAT:- As relying on M/s. Pfizer Healthcare India Private Limited [2021 (2) TMI 1152 - MADRAS HIGH COURT] time limit for passing the TPO order in the case of assessee would expire on mid-night of 30th January 2016 i.e. (00:00 Hrs of 30th January 2016). Here in this case, the order of TPO has been passed on 31st January 2016 and accordingly, the TPO order is clearly barred by limitation by one day by virtue of time limit provided under section 92CA(3). The TPO order admittedly has been passed after the limitation has expired and consequently, the same has to be treated as bad in law and is hereby quashed. Thus, in such a situation it has to be reckoned, as if there is no TPO order and consequently, the entire transfer pricing adjustment propo....... + More
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2023 (2) TMI 1111
TDS u/s 194J - Disallowance u/s 40(a)(i) - non-deduction of TDS - payment of interconnect user charges as it could not be categorized as fee for technical services - HELD THAT:- Hon’ble High Court has noted in the case of Vodafone South Ltd.[2016 (8) TMI 422 - KARNATAKA HIGH COURT] which hold that no TDS is required to be deducted by the assessee on payment of interconnect user charges as it cannot be categorized as fee for technical services, thus decided the aforesaid issue in favour of the respondent-assessee. Addition on account of excess depreciation claimed - assessee has taken license which allows the assessee to use that particular right on payment of certain amount and that being an intangible asset on which depreciation is allowable @ 25% only - HELD THAT:- As in assessee’s own in AY 2013-14 case granted the relief t....... + More
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2023 (2) TMI 1110
Set off of Credit of MAT u/s 115JB - HELD THAT:- According to Section 115JB of the Act income tax payable is to be compared with the specified percentage of Book Profits computed u/s 115JB. In the case before us the AO as compared the assessed income with the Book Profits and thereby, arrived at the incorrect conclusion that income tax is payable under MAT provisions contained in Section 115JB. We hold that in the facts and circumstances of the present case the income tax for the AY 2018-19 would be payable under normal provisions and therefore, the Appellant would be entitled to claim set-off of the MAT credit as per the provisions of Section 115JAA - Accordingly, we direct the AO to verify the records and re-compute the tax liability of the Appellant after granting the set off of MAT credit as available to the Appellant in terms of Section 115JB of the Act while passing order giving effect to the decision in the present appeal.
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2023 (2) TMI 1109
Revision u/s 263 - Scope of audit objection - licence fee payments to the Municipal Corporation, Ambala during the year under consideration was not properly verified by the AO - HELD THAT:- The assessee, in this case, has been subjected to multiple litigation only because of non-settlement of audit objection. Firstly, the audit party mistook the figures and held that 2/3 of the expenditure was a deferred revenue expenditure which was to be disallowed. However, the said objection was not admitted by the Assessing Officer. Since, the said audit objection was not settled by the audit party, therefore, the assessee was subjected to reassessment proceedings. Even no addition was made in the reassessment proceedings and the Assessing Officer time and again wrote letters to the CCIT to settle the audit objection. However, since the ITO(Audit) di....... + More
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2023 (2) TMI 1108
Income deemed to accrue or arise in India - Royalty receipts - Revenue earned from sale/distribution of software - Income chargeable to tax in India as Royalty under Article 12 of India- Ireland Double Taxation Avoidance Agreement (DTAA) - assessee is a non-resident corporate entity incorporated in Ireland engaged in the business of sale of software and hardware and provision of support services - HELD THAT:- As in assessee’s own case in assessment year 2013-14 2018 (12) TMI 112 - ITAT DELHI] and AY 2014-15 [2020 (7) TMI 824 - ITAT DELHI] has decided the issue in favour of the assessee to hold that the amount received by the assessee from sale of software cannot be treated as royalty under Article 12 of India - Ireland tax treaty. In any case of the matter, now the issue is no more res integra in view of the decision of Engineering Analysis Centre of Excellence Pvt. Ltd. [2021 (3) TMI 138 - SUPREME COURT]. Accordingly, we delete the addition - Assessee Grounds are allowed.
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2023 (2) TMI 1107
Permanent Establishment (PE) in India - Article 5 of Indian - Japan Double Taxation Avoidance Agreement (DTAA) - attribution of profit to the PE - assessee is a non-resident corporate entity incorporated in Japan - HELD THAT:- There cannot be any dispute that factually the impugned assessment year stands in identical footing to assessment years 2014-15 and 2015-16. [2022 (3) TMI 660 - ITAT DELHI] - This is further evident from the fact that, both, the AO and learned DRP have acknowledged that the factual position in the present assessment year is identical to the preceding assessment years. Thus, respectfully following the decision of the Coordinate Bench, as discussed above, we hold that the assessee had no PE in India in any form whatsoever. Therefore, the addition made by attributing a part of the income of the assessee to the alleged ....... + More
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2023 (2) TMI 1106
TP Adjustment - comparable selection - exclusion of persistent loss company - HELD THAT:- A similar case has been decided in the case of Commissioner of Income-tax v. Future First Info Services (P.) Ltd. [2022 (7) TMI 748 - DELHI HIGH COURT] has held that the persistent loss company cannot be considered as a good comparable. We further noted from the judgement relied by the Ld DR in which it has also been held that the persistent loss company cannot be considered as a comparable company with the assessee company. The facts of the case on hand are also similar and, therefore, the decisions quoted (supra) are squarely applicable. Respectfully following we dismiss the grounds taken by the assessee that M/s. Hindustan Motors Ltd. is not a good comparable company and accordingly we uphold the orders of the lower authorities. In the result the ....... + More
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2023 (2) TMI 1105
TP Adjustment - interest on outstanding receivables - Outstanding receivables from unrelated parties - HELD THAT:- We find force in the contention of assessee. Since the assessee has provided similar services to unrelated parties and claims that no interest was charged with respect to outstanding receivables from unrelated parties, in all fairness, this contention cannot be brushed aside lightly, though needs due verification by lower authorities. We, therefore, restore this issue to the file of the TPO/AO. The assessee is directed to furnish necessary documentary evidences to demonstrate that on outstanding receivables from unrelated parties, no interest was charged on similar transactions as that with AEs and the AO/TPO is directed to examine the same and decide the issue afresh as per provisions of law. In light of the above, if the AO....... + More
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2023 (2) TMI 1104
TP Adjustment - determination of ALP of the back-office support services rendered by the assessee for which the assessee received payments from its AE - Comparable selection - HELD THAT:- Concentrix Daksh Services India Pvt. Ltd. in the search matrix of BPO back-office services and therefore is no evidence brought on record to show that the predominant activity of the assessee is not that of backoffice support services. In this regard, we also notice that in the search matrix / filter applied by the assessee, the assessee itself has adopted a filter of choosing companies with income from a major line of activities ≥ 50% of the total revenue selected for performing similar functions such as the assessee. It has also applied a filter of comparing companies performing broadly comparable companies of rendering services with similar cost st....... + More
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2023 (2) TMI 1103
TP Adjustment - Comparable selection - HELD THAT:- Datamatics Financial Services Ltd. comparable is functionally dissimilar and hence cannot be considered. Allsec Technologies Ltd. - TPO has considered the financial over the period of three years and hence rejected this as a comparable. We decline to interfere with the order of the ld. CIT(A) who affirm the order of the TPO. Computation of profit margin of two comparables - ICRA Online Ltd. and Axis IT &T Ltd. - ICRA Online Ltd. (19.13%) TPO wrongly adopted margin of 19.13% in its order dated 01 June 2015 while giving effect to CIT(A) order. Corrected margin of 17.08% should be considered.TPO has incorrectly treated Interest and Miscellaneous Income as operating income and loss on sale of assets as operating expense. In doing so, the TPO failed to appreciate that these are non-operati....... + More
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2023 (2) TMI 1089
Validity of penalty levied u/s 271(1)(b) - non-compliance of notice u/s 142(1) - HELD THAT:- CIT(A) while confirming the action of Assessing Officer held that no submission is filed before him despite affording reasonable opportunity. As in Akhil Bhartiya Prathmik Shmshak Sangh Bhawan Trust [2007 (8) TMI 386 - ITAT DELHI-G] held that where assessee had not complied with notice u/s 142(1) but assessment order was passed u/s 143(3) and not u/s 144, that meant that subsequent compliance in the assessment proceedings was considered as a good compliance and defaults committed earlier were ignored by Assessing Officer and, therefore, penalty u/s 271(1)(b) was not justified. Similar view was followed in a series of decisions as has been relied by assessee in his submission. Thus, considering the fact that assessment in the present case was compl....... + More
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2023 (2) TMI 1071
Disallowance towards interest u/s.36(1)(iii) - Funds borrowed for purchase of land and shown as stock-in-trade in the balance sheet - interest expenditure on borrowed funds incurred by the assessee for purchase of land at Pali has to be capitalized as ‘work-in-progress’ (WIP for short) - HELD THAT:- The said capital was borrowed for the purpose of the business of the assessee by way of purchase of land at Pali for its real estate purchase. AR has also relied on the decision of Tetron Commercial Ltd. [2003 (1) TMI 67 - CALCUTTA HIGH COURT] wherein the said proposition was reiterated by the fact that the borrowed capital utilized for the purchase of business of the assessee, whether or not the same is in the nature of capital expenditure or revenue expenditure, the interest payable for the said loan is to be allowed u/s. 36(1)(i....... + More
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2023 (2) TMI 1070
Revision u/s 263 - repayment of unsecured loans to the alleged shell companies considering the provisions of Section 69C r.w.s. 115BBE - HELD THAT:- The issue under consideration was duly examined by the AO in the assessment proceedings and conscious decision was taken after due application of mind. Accordingly, it is not a case of lack of inquiry by the Assessing Officer. Secondly, as regards applicability of section 69C of the Act, we observe that section 69C applies in case of unexplained expenditure, source of which remains unexplained. In the assessee’s case, repayment of loan does not constitute any expenditure and further, the source of such repayment was also explained by the assessee both before the Assessing Officer as well as PCIT. Accordingly, in our view section 69C of the Act cannot be invoked in the instant facts. In ....... + More
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2023 (2) TMI 1069
TDS credit - mismatch in credit of tax deducted at source claimed by the assessee in the return of income - As submitted tax credit claimed by the assessee in the return of income is in accordance with the credit available as per Form 26AS - as per CIT-A assessee is entitled to credit of TDS deducted in respect of interest income and advance received from Kerala Government during the year under consideration - HELD THAT:- In the case of Arvind Murjani Brands (P.) Ltd. [2012 (5) TMI 138 - ITAT MUMBAI] ITAT held that where amount on which tax was deducted at source is not at all chargeable to tax, command of section 199 will have to be harmoniously and pragmatically read as providing for allowing credit for tax deducted at source in year of receipt of amount, in which tax was deducted at source. As decided in M/S. ZELAN PROJECTS P. LTD. VER....... + More
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